Commissioner Of Income Tax-I v. Smt U.Srilakshmi

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 20.8.2019 CORAM :

THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM AND THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case Appeal No.241 of 2011 Commissioner of Income Tax-I, Tiruchirapalli ...Appellant Vs Smt.U.Srilakshmi, Trichy-3.

...Respondent

APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 23.12.2010 made in ITA.No.160/Mds/2009 on the file of the Income Tax Appellate Tribunal, Chennai 'D' Bench for the assessment year 2005-06 against the Commissioner of Income Tax(Appeals)-IV Williams Road,Contonment,Thiruchirapalli 620 001 dated 17.12.2008 in ITA.No.285/07-08 GI NO./PA.NO. AAFPU 4705R for the Assessment year 2005-2006 and against the order of the Assistant Commissioner of income tax Company Circle III Tiruchirapalli dated 31.12.2007 PAN/GIR NO.AAFPU 4705R for the Assessment Year 2005-06 respectively.

For Appellant: Mr.M.Swaminathan, SSC assisted by Ms.V.Pushpa, SC and Ms.S.Premalatha, SC For Respondent:

Mr.A.S.Sriraman Judgment was delivered by T.S.Sivagnanam,J We have heard Mr.M.Swaminathan, learned Senior Standing Counsel, assisted by Ms.V.Pushpa and Ms.S.Premalatha, learned Standing Counsel appearing for the appellant - Revenue and Mr.A.S.Sriraman, learned counsel appearing for the respondent - assessee.

2. This appeal, filed by the Revenue under Section 260A of the Income Tax Act, 1961 is directed against the order

dated 23.12.2010 made in ITA. No.160/Mds/2009 on the file of the Income Tax Appellate Tribunal, Chennai 'D' Bench for the assessment year 2005-06.

3. The appeal was admitted on 11.7.2011 on the following substantial questions of law :

"i. Whether, on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the Assessing Officer was not justified in rejecting the books of accounts in spite of the serious defects found and in deleting the estimated addition made in the assessment ?

ii. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in deleting the addition under Section 40A

(3) on the ground that no single payment exceeded the prescribed limit of Rs.20,000/- even though the Assessing Officer had established that the payment to the same person had been split artificially and shown in the names of fictitious persons ?

iii. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that once gross profit addition was made on estimate basis the declared profit, no disallowance under Section 40A(3) could be made? And iv. Without prejudice to the previous questions, whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that no disallowance under Section 40A(3) could be made even after deleting the gross profit addition made by the Assessing Officer?"

4. The learned Senior Standing Counsel for the appellant submits that the above appeal is not pursued by the Revenue on account of the low tax effect in terms of Circular No.17/2019 dated 08.8.2019 issued by the Central Board of Direct Taxes. By the said Circular, the monetary limit for filing or pursuing an appeal before the High Court has been increased to Rs.1 Crore. It is further submitted that the

tax effect in this case is less than the threshold limit.

5. In the light of the said submissions, the above tax case appeal is dismissed on account of the low tax effect. The substantial questions of law framed are left open. In the event the tax effect is above the threshold limit fixed in the said circular, liberty is granted to the Revenue to make a mention to this Court to restore the appeal to be heard and decided on merits. No costs.

Sd/- Assistant Registrar(CS) //True Copy// Sub Assistant Registrar RS TO THE INCOME TAX APPELLATE TRIBUNAL, CHENNAI 'D' BENCH. 2.THE COMMISSIONER OF INCOME TAX(APPEALS),THIRUCHIRAPALLI 3.THE ASSISTANT COMMISIONER,INCOME TAX COMPANY CIRCLE III,TIRUCHIRAPALLI +1cc to Mr.m.Swaminathan , Advocate SR.No. 70578 +1cc to Mr.S.Sridhar, Advocate SR.No. 70612 TCA.No.241 of 2011 A.SK(15/10/2019)